Block (SQ) Analysis
Inspired to solve the personal problem of credit card access limitations to making a sale, Jack Dorsey and Jim McKelvey founded Block in 2009. The solution they created was a square-shaped small portable credit card reader that plugged easily into a smartphone.
Block is helping people overcome barriers and gain access to the economy. They are building an ecosystem of ecosystems by creating tools that enable economic empowerment.
Team As Chair and CEO Jack is deeply aligned and embedded in Block’s mission to create tools for economic empowerment. With a 10.8% stake in the company, he has substantial skin in the game.
Distinguished board members:
- Co-founder Jim McKelvey, Chair of the Federal Reserve Bank of St. Louis
- Larry Summers Former Secretary U.S. Department of the Treasury
- JAY-Z, Founder, and Chair of Roc Nation
Square helps sellers seamlessly run and grow their business
- Commerce- POS (Point of Sell), Appointments, Online Checkout
- Customers- Gift cards, Messages, Loyalty & Rewards
- Staff- Crew, Time cards, Payroll, Team Management
- Banking- Loans, Checking, Savings Square Card
Afterpay Buy Now, Pay Later
- 4 payments over 6 weeks, with no interest
Cash App makes money more relatable, accessible, and instantly available
- Free to send and receive cash, stocks, and Bitcoin
- #8 most downloaded app in 2021
- At the end of March 2022, there were 80 million annual actives who participated in a financial transaction on Cash App’s network
- During the month of September 2022, there were 49 million Monthly actives
- In the 3rd quarter of 2022, Cash App generated $2.68 billion in revenue and $774 million in gross profit
TIDAL Is a platform that offers unique experiences and wants to bring fans closer to their artists
- It is a global streaming platform equipped with a financial infrastructure designed specifically for all aspiring artists and creators, to enable them to become successful entrepreneurs. Inevitably a YouTube 5.0 economy should form where all kinds of creators, artists, and great projects will be found, funded, developed, and continuously improved.
TBD Is building a decentralized exchange, Bitcoin Miner, and Bitcoin Hardware Wallet
https://areweweb5yet.com/ 64% completed
- With all the benefits of a bank, Block has the ability to issue loans (money printer 1.0)
- Bitcoin presents the almighty ability to sell and or lease money-minting machines, that are universally accessible and economically enabling for all (money printer 5.0)
- Importantly Block is built and backed with both the U.S. dollar and Bitcoin. There may come a time when not just what you own matters, but where and how it is owned.
- TBDex- connects the world of physical legacy money to the digital and decentralized one
Spiral builds and funds projects to make Bitcoin better
- LDK (Lighting Developer Kit) enables the faster and less costly transfer of Bitcoin
Today's valuation (4-30-2023)Price = 36.5 billion (market cap) - 17.2 billion (book value of equity)= 19.3 billion (value)/ 5.9 billion Trailing Twelve Months (TTM) gross profit= 3.3 ratio
Stock vs. S&P price performance
Projections: 2x in 5 to 7 years (2027 - 2030)$30 billion revenue$10 billion gross profit$3 billion free cash flow$100-120 stock price$111- $150 billion market cap
My BiasesAnchoring/Ownership- I own shares of BlockFounder Admiration- I admire and look up to Jack and their mission to build and share tools to enable economic empowermentConfirmation- I believe in Bitcoin and the principles for a true and fair monetary system accessible and accountable to all
Conclusion:
This business seems to have lots of spawning ability and is reasonably priced. They are a big 1st mover in the space of Bitcoin and are creating new addressable markets in the financial services space worldwide.
Some parting words from Aristotle:
“Patience is bitter, but its fruit is sweet.”
P.S.
I would like to acknowledge The Investors Podcast team for motivating me to write this analysis, thank you!
Discloser: I am long Block (SQ)
*Nothing here is intended to be investment advice. This content is for informational purposes only. Please consult a professional before making financial decisions.*